Cash-rich sovereign wealth funds are unlikely to come to the rescue of battered global financial markets for some time to come, according to Vanguard, the $1,000bn (£694bn, €776bn) strong US fund management house.

A series of Asian and Middle Eastern state-run entities have had their fingers burned after moving prematurely to snap up stakes in beaten-up western financial stocks. The Abu Dhabi Investment Authority, the Government of Singapore Investment Corporation and the Kuwait Investment Authority all invested in Citigroup, while GSIC also invested in UBS, China Investment Corporation bought a stake in Morgan Stanley, the Qatar Investment Authority became the biggest shareholder in Barclays and Singapore’s Temasek invested in Merrill Lynch.